Why TV Offers the Whole Package to CPG Marketers

Everyone can name a few consumer packaged goods that stir feelings of fierce loyalty: the chip they serve at every Super Bowl party, the laundry detergent that they swear works better than others, or the brand of soup they've been eating since childhood.

In recent years, the CPG industry has been met with numerous challenges. Some, such as the need to compete with two-hour shipping windows, are due to digital transformation; i.e., using digital technology to solve problems. Changing consumer behavior is also presenting challenges to the CPG industry. Consider a recent study showing that more than half of all consumers surveyed in the U.S. and UK had reduced the amount of disposable plastic they used in the previous year — a laundry detergent brand may find itself forced to rethink its packaging, for example. Home products brand Seventh Generation is one brand that uses blends of recycled cardboard and newspaper to produce its laundry detergent bottle.

Beyond sustainable materials, millennials are almost four times more likely than baby boomers to avoid buying products from "the big food companies,"according to McKinsey. Thanks in large part to health concerns, salt-laden soup may no longer be the lunch of choice. Add in the fact that new entrants are disrupting the traditional CPG-customer relationship and it's no wonder that 80 percent of leading CPG-brand chief executive officers are concerned that their business model may be at risk.

In response, many CPG companies are rethinking their portfolios, tailoring new products with wellness and more sustainable packaging in mind, and creating their own private labels. Others are investing in ways to drive innovation, including venture funds and incubators.

Alongside those smart moves, they're also rethinking their marketing strategy. Television, they may come to realize, can provide a solution to many challenges they're facing.

Out-of-the-Box CPG Strategy

Despite loyalty from some consumers, CPG brands have long been plagued by high market saturation levels and low consumer switching costs. It's easy to switch from one brand to another, depending on price or availability.

This makes it vital for a brand to prioritize top-of-mind awareness. Data-driven TV advertising can be an instrumental part of that strategy.

Brands can use indexed linear television, for instance, to identify consumers more likely to be in-market for a particular product. And today's indexed TV applies modern data sets to TV marketing. By matching data such as purchasing habits or household income to viewing habits, a CPG brand can reach its target audiences efficiently with a relevant message.

For a more targeted approach, addressable TV advertising allows brands to home in on a receptive audience at a granular level. It also follows the customer journey, using purchase and behavioral data to target current buyers to increase market penetration, boost customer loyalty, identify purchasers of competing brands or products to promote switching, and tap lapsed purchasers to help bridge gaps in purchase history.

The assumption may be that addressable TV advertising is worth the investment only for industries and brands seeking specific customers for costly products or services — middle-age women seeking to upgrade the family car, for example, or golfers planning their next resort vacation. Following that line of thinking, makers of mass-market items that almost everyone uses (e.g., tissues, soap, or sandwich bread) need only to cast the widest possible net and reach the largest audience to prosper.

Targeting a more specific audience at the household level, however, can minimize waste while retaining an effective level of reach. For instance, one CPG brand used addressable to shift share from a competing brand, resulting in a 21 percent increase in brand penetration.

Additionally, both indexed TV campaigns and addressable TV campaigns offer valuable insights on what worked and what didn't work with a campaign. For indexed linear, automated content recognition (ACR) data gives clarity on who watched and what they were exposed to. After an addressable campaign, marketers can measure incremental impact against their brand's KPIs.

Bottling the Power of TV 

Marc Pritchard, chief brand officer of Procter & Gamble, a company whose products are used by some 5 billion people globally each day — and one that has been widely celebrated for the success of its mass marketing — told attendees at an ANA gathering that there was a pressing need to reinvent traditional modes of advertising. The ideal would be "mass reach with one-to-one precision," he explained. That's as good a definition of addressable TV as any.

Indexing and addressable TV advertising, two highly potent mediums, offer both precision and the scale CPG marketers require.

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